Vedanta Resources and other commodity companies led the market higher as the first day of the new quarter got off to a bright start.

Vedanta rose 127p to £14.15 after news that it planned to increase its share buy back programme by 40% to $350m. The mining sector had already been strong as better than expected manufacturing surveys across the globe, especially from China and the US, pushed metal prices higher on hopes for increased demand. Oil was also stronger, after US inventories fell by more than forecast, the dollar weakened and there was also disruption following attacks in Nigeria.

So Eurasian Natural Resources Corporation ended 40p better at 694.5p, Antofagasta added 37p to 624.5p and Xstrata climbed 35.9p to 693.2p. Among the oil companies, BP was 12.2p better at 490p after it won a key Iraqi contract while Royal Dutch Shell A shares rose 37p to £15.55.

With Wall Street up more than 100 points by the time London closed, the FTSE 100 finished 91.50 points higher at 4340.71.

International Power surged 15.75p to 253.75p after it sold its Czech business for £738m, including debt. The long-awaited disposal - to investment firm J&T Group - will give International Power a £380m profit on the deal. Analyst Tina Cook at Charles Stanley advised clients to accumulate shares, saying:

"The sale of the Czech operations (and other recent disposals) and expectations of strong free cash flow should help reduce leverage and further ease any investor concern over refinancing in 2010 (£700m due in 2010). Proceeds from the sale will be used for general business purposes. The disposal makes sense given that the company sees limited scope to materially expand its business in the Czech Republic."

Marks & Spencer moved ahead 11.5p to 317.5p in the wake of better than feared first quarter figures. Singer Capital Markets said:

"UK sales were considerably better than in the preceding periods, with the benefits of internal self help, its 125th anniversary campaign, seasonal weather and the timing of Easter all coming into play against a weak comparative from last year. We believe today's sales figures ought to add between £10m-15m to full year pretax profit estimates, an upgrade of around 2-3%."

Rival Next was helped by the M&S figures, with its shares adding 57p to £15.26.

But BAE Systems dipped 1.25p to 337.25p as it missed out on a $1.1bn contract to build 2,244 armored trucks for use by US troops in Afghanistan. The order was won by US group Oshkosh Corporation.Analysts at Royal Bank of Scotland said:

"It is quite possible that a requirement for a high rate of deliveries in the [US truck] contract will result in contracts for several suppliers. We have, however, deemed our former target price of 475p to be untenable in the current market environment and so have reduced it to 425p, a level that we believe is quite attainable."

Lloyds Banking Group lost 1.68p to 68.25p in the wake of noises from the European Union about possible asset sales due to it receiving state aid. A downgrade from Credit Suisse, which has cut its price target from 55p to 50p, has not helped. In contrast to much recent commentary from analysts, Credit Suisse is downbeat on the bank:

"An increasing part of the market is warming to Lloyds. We are not. Some of our concerns are short term, like shrinking deposit revenue that we don't think will be significantly assisted by structural hedges. Indeed, we doubt HBOS, which accounts for 56% of Lloyds deposits, has any significant formal hedge in place. There's also increasing basis risk. We don't have the numbers for Lloyds TSB but HBOS now has over £90bn more funding priced off Libor than assets.

"But many of our concerns are medium term, like the fact that 19% of HBOS corporate loans (excluding overseas and financials) are not paying. As these are written off, income should fall. Deposit competition is also intensifying and combined with a likely mix shift towards fixed rate bonds - Lloyds is paying 190 basis points over swaps on one-year products - we see a marked impact on margin. Similarly, terming out its relatively short funding structure will also likely push income lower - Lloyds latest unsecured term issue cost swaps + 310 basis points.

"In time, better asset yields should partly offset these issues, but we expect weak new business volumes and the mix effect of writing higher quality lending to delay the impact. In the long-term pre-funded deposit protection schemes, more onerous capital requirements - particularly as risk weighted assets re-inflate - and the potential impact of any EC ruling also concern us. With the outlook so unclear, we don't much like the concept of "normalised EPS", but we think 8p post 2012 is reasonable. This is 6p in present value terms and given the risks, that leaves Lloyds looking expensive, in our view."

Hedge fund group Man dropped 15.5p to 263p, a fall accounted for by the company's shares going ex-dividend.

Elsewhere National Express lost 25.5p to 284p as it issued a profit warning and the UK government said it would take over the running of the company's loss making East coast franchise.

Homeserve, the home insurance business, was hit by a downgrade from analysts at UBS who cut their rating from buy to neutral. Although it set a £16 price target on the company, in the market Homeserve's shares fell 58p to £14.42.

However housebuilder Taylor Wimpey climbed 2.5p to 36p as Merrill Lynch upgraded from neutral to buy as part of a review of the sector. The broker was also positive on Persimmon, up 5.25p to 355.25p.

Aim-listed Freedom4 - formerly Pipex - jumped 0.95p to 4.05p after news of a reverse takeover by telecoms group Daisy, as part of a deal worth around £122m to be funded in cash and shares.